Wentworth Institute of Technology VP of Finance and Consultant Share Their Advice
Self-insurance wasn’t a novel approach for Wentworth Institute of Technology’s employee health insurance program. They self-funded the program over twenty years ago, well before it became common practice. “Wentworth had been self-insured for many years before joining edHEALTH,” said Wentworth’s Vice President of Finance and CFO, Bob Totino. “This arrangement saves the school from paying profits on top of claims to the health insurance administrators."
On average, compensation and benefits make up 60% of higher education budgets and fiscal departments are keen to find new solutions for reining in costs. "Wentworth Institute of Technology discovered edHEALTH through our participation in The New England Educators Insurance Association (NEEIA), a group of seven private higher educational institutions that collaborated to improve the cost, availability, and service of workers compensation and other employee insurance benefits," said Bob. The school and 21 other colleges and universities provided seed money to create a group purchasing coalition —Educators Health (edHEALTH) — to tackle rising healthcare costs.
When Wentworth became a member-owner of edHEALTH, it had 328 subscribers, which was a small risk pool. Joining edHEALTH helped the school leverage a bigger group’s purchasing power. "Moving from our own self-insured arrangement to the edHEALTH self-insured arrangement provided economies of scale on administrative and stop-loss costs," said Bob.
“By being part of a collaborative, Wentworth reduced its fixed costs, which account for approximately 10% of overall healthcare spending,” said Sue Shillue, President of Cook & Company Insurance Services, Inc., Wentworth’s advisor. “edHEALTH also negotiated a strong prescription drug carve-out contract, which has generated additional savings.”
Wentworth has enjoyed only one rate increase since joining edHEALTH in 2014. “The claims are the claims, but Wentworth’s administrative costs have decreased dramatically since becoming a member of edHEALTH,” said Sue. “When we were evaluating the edHEALTH option for Wentworth, it was clear that joining was in the best interest of our client.”
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